Another case of a disappearing HOA Golf Course

By Deborah Goonan

In the past week there has been a flurry of activity surrounding the Silverstone Golf Club in the Las Vegas area. The privately owned 27-hole golf course with its club house, located within a homeowners association community, has been struggling financially for years. The business recently sold to an attorney from California, Ronald Richards, who has since closed the golf course and terminated its employees. It’s unclear exactly what the plans are, but it seems evident that Richards intends to redevelop the land.

About 300 homeowners, especially those with golf course views, are not at all happy, and recently gathered at a meeting to discuss their options. They’ve hired an attorney, and a judge has just ordered the new golf course owner to refrain from dismantling the irrigation system or any other part of the course – at least for now.

You can read about the situation here:

JUDGE ORDERS SILVERSTONE TO TURN ON GOLF COURSE WATER AGAIN

https://www.reviewjournal.com/local/local-las-vegas/judge-orders-silverstone-to-turn-on-golf-course-water-again/

And in a previous report from last week:

Silverstone Golf Club closed; future uncertain

http://www.reviewjournal.com/business/silverstone-golf-club-closed-future-uncertain

If you read through the comments, there is some debate as to whether or not homeowners were entitled to vote on the sale or redevelopment plans, based upon the CC&Rs (Covenants, Conditions, & Restrictions). That will be a matter for attorneys to hash out. The legal battle has already cost the HOA hundreds of thousands of dollars.

The Silverstone story is repeating itself all over the US.

The fact is, golf is not as popular as it was a few decades ago. The sport is expensive and time-consuming. Golf course maintenance has become much more costly due to water restrictions and increases in utility rates. Environmental concerns over turf treatments and pesticides have given rise to a public distaste for golf courses, and regulations on the use of chemical treatments has also increased operating costs. Younger generations have little interest in Country Club memberships, preferring to have the flexibility to dine and recreate wherever the mood dictates.

In the heyday of golf, two kinds of HOAs were built with golf courses as the centerpiece. Some of these HOAs actually own the golf courses and related amenities. Homebuyers pay a premium home price or initiation fee at the time of purchase, and their HOA assessments pay for ongoing operation and maintenance.

But that model proved unpalatable for most homebuyers, who could not afford the steep sale prices and monthly assessments. So many developers went into the golf business, or partnered with existing golf course owners, and then built homes around the greens, fairways, sand traps, and water features. In these HOAs, Country Club membership is optional and at additional cost. Often, Club membership is open to golfers who live outside the HOA community. That’s the case with Silverstone and thousands of other golf communities – most of them HOAs – around the country.

As popularity of golf has waned, so has membership. Thousands of golf courses are losing money and going out of business. However, the land often has value, and that attracts investors with plans to rezone and redevelop. If the land is not purchased and redeveloped, the abandoned golf course quickly becomes an overgrown eyesore and a hangout for vagrants.

In a handful of cases, the city or county purchases the golf course and converts the land to public use. But most governments don’t want to invest public funds that will end up being a drain on tax revenue. So unless the owners in Silverstone HOA are prepared to purchase the golf course from its new owner, and then maintain it as a golf course or green belt in perpetuity, there is probably very little to prevent redevelopment.

Owners of golf course view homes will most likely view new homes or multifamily structures instead of manicured open space. Some may even see limited commercial construction. There are no guarantees when you purchase adjacent to a private golf and country club business.